Microsoft is finally saying they are against firmware hacks that allow Xbox 360s to play game backups
Microsoft, has decided that it will crack down on firmware hacks that enable the games console to play backups. If Microsoft detects that your 360 had been modified, it can ban your consoles MAC address from their "Live" service.
we can probably consider it a fact that MS is currently acting against modded Xbox 360s, and you should start worrying if you’ve got a firmware replacement in your XBOX 360.